Ringgit strengthens against U.S. dollar and major currencies on pre-budget optimism

THE ringgit opened higher against the US dollar and other major currencies on Tuesday, buoyed by investor optimism ahead of Malaysia’s national budget announcement scheduled for Friday and supported by stronger international reserves.

At 8 am, the local currency stood at 4.2075/2260 against the greenback, improving from Monday’s close of 4.2125/2155.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit was likely to trade within a narrow band for the day as markets await fiscal clarity from the upcoming budget tabling.

“The dollar-ringgit is expected to trade between RM4.21 and RM4.22 today,” he told Bernama.

Kenanga Investment Bank Bhd noted that Bank Negara Malaysia’s international reserves rose by US$0.9 billion in September to US$123.6 billion – the highest level in nearly 11 years. This was largely attributed to gains from gold revaluation and an increase in foreign exchange holdings.

In ringgit terms, total reserves reached RM520.9 billion, a four-month high.

“Despite bond outflows, net foreign exchange reserves climbed to a three-year high of US$73.3 billion, supported by ongoing corporate forex repatriation, which helps underpin the ringgit’s resilience,” Kenanga said in a research note.

The investment bank also highlighted the ringgit’s strong regional performance, noting it was among the top-performing ASEAN-5 currencies in September, extending its rally for the eighth consecutive month.

While weaker global demand may moderate Malaysia’s growth in the second half of 2025, Kenanga said domestic momentum remains firm, driven by services, household consumption, targeted policies, and structural reforms.

“At this juncture, the current policy rate remains supportive of growth, and rate cuts appear unnecessary as long as domestic demand stays firm,” the note added.

The ringgit also strengthened against a basket of major currencies.

It gained against the euro to 4.9030/9246 from 4.9135/9170, firmed versus the Japanese yen to 2.7663/7786 from 2.7938/7960, and rose against the British pound to 5.6465/6713 from 5.6620/6661.

Among regional peers, the ringgit was also stronger. It advanced against the Thai baht to 12.9473/13.0115, improved versus the Singapore dollar to 3.2520/2669, edged up against the Philippine peso to 7.24/7.27, and gained on the Indonesian rupiah at 254.0/255.2. - October 8, 2025